in

Property tax sale system reform bill to Mr. Pritzker

Advertisements

Illinois’ property tax sale system is currently being reformed, and a bill backed by the Cook County Treasurer and the Chicago Community Trust has passed Congress and sent to Governor J.B. It is expected to be signed into law by the governor.

“Over the past two generations, the tax sale system has evolved, whether intentionally or not, into a means of stripping wealth and promoting inequality in some of the most vulnerable communities,” Chicago Democrat. Rep. Kam Buckner, a member of Congress and a Democrat, said. The bill’s sponsors said in a statement. “The bill aims to rebalance the tax sales system in the interest of local governments, residents and community developers who actually want to reinvest in their neighborhoods from scratch.”

The measure would reform the state’s system of selling delinquent property taxes. Under the current system, property owners who do not pay their bills could have their taxes auctioned off. Once sold, a lien is placed on the home or business until the owner is able to repay taxes and interest to the buyer. Delinquent sales allow tax authorities to recover unpaid revenue while giving property owners extra time to pay their bills without losing their home. Investors can also make profits with low risk. Most homeowners will eventually pay back their taxes with interest.

But a Treasury Department investigation released last fall found that a small number of retail investors had abused the system, using “mis-selling” loopholes to reverse transactions and recover their investments and interest. bottom.

The “missale” process was created to reverse a tax sale that should never have occurred, such as when the property owner had already paid taxes before the sale.

According to the Treasury Department, investors have used the clause to find minor discrepancies in government records, such as homes that didn’t have air conditioning when they weren’t, or brick houses that were plastered. It is said that he has argued that the sale should be invalidated because there is. .

In the event of an erroneous sale, the Treasury will reimburse the investor, including interest of up to 1% per month, plus fees accumulated over the period of non-payment of property taxes.

According to the Treasury Department, these loopholes drain $40 million a year from local government coffers, mostly in black and Latino neighborhoods where properties are located. The Department found that a total of $277.6 million, including at least $27.7 million in interest, was returned to taxpayers in an investigation into the erroneous sales from September 2015 to September 2022.

Under this bill, which the Chicago Community Trust and others have been working on for years, investors can still claim that the county made a mistake, but it was a serious one. There must be, and that decision will be made by the government. Judge, said the Treasury Department.

Cook County Treasurer Maria Pappas’ office released a report earlier this year that collection rates were particularly low in the Southern Suburbs, leaving many communities in financial distress and unable to provide basic services. and highlighted the impact of delinquent property taxes on local governments.

The Treasury Department said the low recovery rate was largely due to the concentration of vacant land in these areas, many of which were hit hard by the 2008 financial crisis.

The measure also aims to curb the proliferation of vacant and abandoned properties, allowing local governments to control properties if they are not purchased in the first round of tax sales. The goal is to stop real estate from circulating in scavenger sales in Cook County, where chronically delinquent real estate taxes are being auctioned.

The amendment is also intended to help Cook County property owners who are behind on their property taxes by lowering the monthly property tax payment rate from 1.5% to 0.75% starting this year.

As of May 3 this year, 73,733 Cook County property owners are in arrears with taxes for the 2021 tax year (billed in 2022), but as of February 2024: That number will go down as people pay for it before the sale season. According to the Ministry of Finance. More than 180,000 people were in arrears on their payments shortly after the billing deadline loomed on December 30.

The Treasury said the “majority” of the late fees went to low-income Black and Latino homeowners, and that lower interest rates cost residents a total of $25 million to $35 million a year, or an annual penalty. It says it can save about half of the payment. county.

“This bill is the result of two years of work by my research and policy teams and is the most significant property tax reform bill approved by the General Assembly in decades,” Pappas said. “This is an important and long-awaited step toward making Illinois’ property tax system more equitable.”

Cook County Commissioner Bridget Gaynor also applauded the bill’s passage. Gaynor also serves as chairman of the county’s Land Banking Authority, which acquires vacant, abandoned, foreclosed, and tax delinquent properties and helps redevelop them.

At the county commission’s regular monthly meeting, Gaynor said efforts to reform tax delinquency policies and scavenger sales went back eight years, with little success. He said reform efforts have been hampered by powerful lobbyists for tax buyers.

Gainer said the bill, which passed Congress, would fundamentally change the county’s land bank and the ability of all suburbs in Cook County to access vacant properties “that will no longer be held hostage” by tax buyers. said it would be “This has allowed us to accelerate development in areas where there is clear demand and to develop at a very fast pace.”

The state Senate passed the bill by a vote of 51-3 on Wednesday, and the House of Representatives approved it by a vote of 77-37 on May 18.

Contributed by AD Quig and Dan Petrella of the Chicago Tribune.

[email protected]

Advertisements
Advertisements

What do you think?

Written by Natalia Chi

Chicago Popular; Chicago breaking news, weather and live video. Covering local politics, health, traffic and sports for Chicago, the suburbs and northwest Indiana.

Leave a Reply

Metra’s schedule will soon undergo major changes.Here’s what’s different and when the new schedule will go into effect

White Sox closer Liam Hendricks plans second live BP session on Friday